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Is US Treasury right on RMB & Yen   [Copy link] 中文

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Post time 2015-10-22 19:57:57 |Display all floors
This post was edited by leiztorc at 2015-10-22 20:00

Yen has been depreciating. In mid-2011 1.00 USD is about 78.33 Yen by early 2013 1.00 USD was already about 92.50 Yen and by early 2015, 1.00 USD is about 120.21 Yen.

That's about 53% depreciation in a spate of slightly more than 4 years.

By the same contrast the RMB had stayed between RMB 6.25 to RM 6.50 against USD 1.00.

US politicians had since 2005 implied China devalued the RMB intentionally but the fact was the RMB had climbed from 8.30 to 6.25. Even today as US Treasury make some announcement today, it made it sound as if China barely avoided being named a manipulator when its currency had appreciated by about 25%.

Why didn't US Treasury named Japan a currency manipulator as it had depreciated its currency by more than 50% in contrast to China's appreciation of 25%? If this isn't manipulation what else is then? Biased preferential treatment? How come the US media never highlighted this nor its current presidential campaigns?

The world should question US and Japan on this.

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Post time 2015-10-23 20:57:21 |Display all floors
A currency manipulator would be a country that has a set no-float exchange rate or peg's their currency to another.  A better term would be a exchange rate manipulator.  

Japan has devalued the yen by expansion of the m3 rating,  the total amount of moneys in the system.  This is something every country does.  But as long as the exchange rate float's based on the market value of the yen,  they would not be considered a currency manipulator.

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Post time 2015-10-24 10:22:16 |Display all floors
Incedius420 Post time: 2015-10-23 20:57
A currency manipulator would be a country that has a set no-float exchange rate or peg's their curre ...

Japan is the third largest by measure of GDP and also a top three or four exporter globally. When the GNI is taken into account Japan is even larger.

Abe did claim that despite their ability and effort they couldn't compete. But this doesn't seem to be the truth. There are about 190 nations and if Japan is a top three both by measures of GDP and exports, how can it claim that its abilities and efforts were stunted by over-valuation of currency?

In terms of white goods, Japan is not exceptionally ahead of both Korea and China or Germany and England in Europe. In terms of industrial machinery and heavy machinery, those from Germany are far more superior than what Japan can produce and today, China's and India's machinery with the exception of the 3% or so high end ones, are more than good substitutes for Japan's.

In transportation, China's trains, Canada's and Germany's all more than match Japan's qualitatively. Cars, You have good marques from US, England and Germany.

Its quite evident that qualitative competition has become quite keen and Japan is losing ground.

By measure of reserves, Japan easily can pay for more than 12 months imports and this has been well sustained fluctuating only marginally up and down along that parameter. In short the position isn't detrimental to Japan.

Hence there is no reason why Japan is not manipulating its currency.

When one compares the Japanese Yen to the Chinese RMB, given that the former moved down against the USD by more than 50% while the latter moved up against the same by about 25%, the correlation is that Yen is depreciated by more than 75% against the RMB. In view that Japan and China No. 3 and No.2 economy respectively) are competing largely on the same products, it follows then that Japan is depreciating its currency to compete against its closest economic competitor. US should not refrain from naming Japan as a currency manipulator just because Japan is considering joining the TPP and is not competing directly against the US. As long as it can be shown that Japan depreciated its currency to compete with a near economic contender/competitor Japan is manipulating its currency. Technicals should not override economic truths.

How IMF could include Yen but not the RMB when such clear blatant currency acts are done baffles the entire world. Are the IMF or the US-Treasury fair measures for the world? One would not think so.     

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Post time 2015-10-24 11:17:37 |Display all floors
leiztorc Post time: 2015-10-24 10:22
Japan is the third largest by measure of GDP and also a top three or four exporter globally. When  ...

None of your post disputes what I said. In fact it proves me correct.  The fact that Japan's yen is sinking in value show's they are not manipulating its currency.  As I posted before,  Adjusting the value threw m3 expansion is something every country does,  even China, at about 10% a year.  

It's the fact that China peg's the rmb to the dollar that allow's Japan to devalue without a equal upswing in the value of the rmb to yen exchange rate.  No country with a market based float exchange rate cares if another country devalues,  the market balances it out.  

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Post time 2015-12-29 12:21:41 |Display all floors
China should not manipulate their economy.

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Post time 2016-1-7 11:36:39 |Display all floors
Frank5 Post time: 2015-12-29 12:21
China should not manipulate their economy.

Care to explain how China's economy is being manipulated?

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Post time 2016-1-7 11:50:38 |Display all floors
There is only so much news that can be reported on. That is why most things fly under the radar so to speak
I am me and that is something you will never be, no matter how hard you try!!

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